accounting 291

This is question 1)

Halloway Company has issued three different bonds during 2011. Interest is payable

semiannually on each of these bonds.

1. On January 1, 2011, 1,000, 8%, 5-year, $1,000 bonds dated January 1, 2011, were issued at face

value.

2. On July 1, $800,000, 9%, 5-year bonds dated July 1, 2011, were issued at 102.

3. On September 1, $200,000, 7%, 5-year bonds dated September 1, 2011, were issued at 98.

Prepare the journal entry to record each bond transaction at the date of issuance.

This is question 2)

The balance sheet for Lemay Company reports the following information on July 1,2011.

Long-term liabilities

Bonds payable $1,000,000

Less: Discount on bonds payable 60,000 $940,000

Lemay decides to redeem these bonds at 101 after paying semiannual interest. Prepare the journal

entry to record the redemption on July 1, 2011.